A San Francisco, Calif.-based shopping service will begin delivering to households in Cedar Rapids, Iowa City, Dubuque and Waterloo on Aug. 15.
Instacart, the nation’s largest on-demand grocery delivery service, will offer deliveries from a number of retailers including Hy-Vee, Sam’s Club, Natural Grocers, CVS Pharmacy, Target, Petco and Whole Foods.
The company contracts with “personal shoppers” to select and deliver the items ordered online by customers through Instacart’s website.
Instacart is the second online grocery shopping service to enter the state. Shipt, a grocery shopping service owned by Target, has partnered with Hy-Vee to offer same-day delivery service.
Hy-Vee already offers delivery with its Aisles Online program. Shoppers select groceries using the company’s website and either pick them up at a store or have them delivered the next day.
Instacart charges a $5.99 fee for orders of $35 or more, which is waived if customers pay $149 annually for a membership. The company also charges a 10 percent “service fee,” which it says helps keep the company operating and is not received by the personal shopper.
Instacart, founded in 2012, said the Eastern Iowa delivery area will cover over 223,000 households. In addition to Cedar Rapids, the company also will offer same-day delivery to Alburnett, Ely, Walford, Fairfax, Hiawatha, Marion, Midway, Mount Vernon, Palo, Covington, Robins, Viola, Springville, Whittier, Shueyville, Swisher, Cou Falls, Toddville, Walford, Bertram and Western.
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“Over the past year we’ve seen incredible demand in the Cedar Rapids area,” Sapna Mitchell, senior operations manager at Instacart, said in a new release. “Launching in Cedar Rapids gives us an opportunity to expand service in Iowa.”
Online grocery sales in the United States amounted to about $14.2 billion in 2017 and are expected to rise to nearly $30 billion by 2021.
But the vast majority of grocery shopping still takes place in traditional brick-and mortar stores, according to Statista, a Hamburg, Germany, market research firm.